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Gunboat diplomacy & economic chokepoints

Imtiaz A. Hussain | Published: August 01, 2019 21:03:19


Three straits may hold global economic growth by the scruff of its neck in the 21st century. Those spanning Hormuz, transiting Malacca, and separating China from Taiwan invoke quite different threats, involve very dissimilar protagonists, and invite global headline news more frequently in this century than before. Yet, none are brand new security alerts, if that serves to dilute any concerns and unfasten any buckled seat belt.

Hormuz, of course, is the tiny strip separating Iran and the Arabian peninsula, whereby the Persian Gulf empties into the Arabian Sea, thence to the Indian Ocean. Through that passage, varying between 21- and 52-odd nautical miles, flows one-quarter of the world's petroleum and one-third of its gas supplies today. Of course, the good news is that, when the January 1974 petroleum production-cuts and price-hikes brought the world to its knees (from $5.12 to $11.65 per barrel, which raised the $3.12 per barrel price of October 1973), twice as much more consumed oil flowed through this particular body of water from a region boasting two-thirds of global oil reserves and almost half of global gas reserves. These are important benchmarks given the exploding global consumption patterns we face today. Dependency may be less critical, still worrisome enough.

Japan, which relies on 80 per cent of its oil imports from the Middle East, was badly humbled in the mid-1970s, symbolising one region of the world still heavily reliant on Middle East oil. Almost half of Chinese oil also originates from here, echoing South Korean dependency too. US President George W. Bush stated in his 2004 State of the Union speech how the United States would reduce 75 per cent of its Middle East oil imports by 2025. In the absence of a coordinated strategic plan, western oil-importers, once the most dependent region on Middle East oil (indeed the source of oil explorers and pumping, shipping and gulping), have eased off for a variety of reasons: the granddaddy consumer of them all, the United States, which has enough oil of its own but still turned to lower-priced Middle East imports, also found, switched to, and heavily exploits shale, so much so, it now exports oil once again. West European countries, which import about one-third of their oil from the Middle East, found limited North Sea deposits, gas from adjacent Russia, cross-Mediterranean oil supplies from Libya.

Malacca, on the other hand, spans 900 kilometers (550 miles), of treacherous waters between the western and eastern tips of Indonesia, sometimes as close to mainland Asia as Malaysia overlooking Singapore, or as far as Vietnam from, say Bali, Indonesia. Even though they turn into some idyllic tourist beaches here and there, those waters seem infected by pirates haunting every vessel, from fishing boats to sprawling tankers (as the 2014  Orapin IV seizure indicates). Not only must these waters be patrolled, but patrol should also be coordinated among feisty and fractious littoral countries. Establishing the Regional Cooperation Agreement on Combating Piracy and Armed Robbery Against Ships in Asia (ReCAPP) was a start in this respect, serving a distant monitoring role through the Information Sharing Center (ISC).

Shoring up confidence-building efforts is the good news that local threats are not directed by any given country against another (though one can free-ride on the presence of such a threat to cajole or coerce other neighbours). Naval fleets are nonetheless not far off, for instance, the US Seventh Fleet in the Indian Ocean and headquartered in Diego Garcia, and its Pacific Fleet headquartered in Hawaii, operating through Asian transit locations (from South Korea to Australia). These have begun to face more local competition, as littoral countries, especially China, have turned to building and deploying their own fleets. China's massive economic project, Belt Road Initiative (BRI), which straddles right across the Malacca Straits, is both compelling and headed towards being fitted with military installations here and there. These cannot but help gnaw confidence-building measures against piracy groups.

Not for the first time, the Taiwan Straits is making strident noise. China's Xi Jinping's "one China" policy approach only just translated into a command to the People's Liberation Army to "unite" China, meaning incorporating Taiwan. On three previous occasions Taiwan had to be bailed out from such a fear: in 1954-5 over the drive to force the nationalists, who had moved to Formosa (Taiwan), to submit; then in 1958, yet again over the Matsu and Quemoy (Kinmen) archipelagos both sides claimed; and more recently in 1995-6, when US President Bill Clinton deployed the full might of the US navy to thwart an overbearing China. Since 2017, a fourth flare-up has been brewing.

Public opinion has been fanned virulently with every China-Taiwan confrontation, thus complicating peaceful gestures, such as expanding trade relations. Though China remains Taiwan's top trading partner, indeed, with Hong Kong, commanding a lion's share of Taiwan's commerce, Taiwan's share of China's total commercial relations has been slipping, falling to a low 2.0 per cent today. That might be puny, but critical since China could turn the screws at any time, as it continues to remind the world it can. Without gigantic external support, such as from the United States, Taiwan cannot hold on forever, although its impressive military prowess even held an advantage over China during as recently as the 1995-6 crisis.

China's ascendance into the global limelight is partly responsible for the increasing attention being paid these straits. Its vast oil needs make Hormuz much more vital a Chinese national interest today than the concurrent US claim. With oil prioritised as the utmost strategic interest by the United States between the 1974 oil price-hikes and the Carter Doctrine of 1980, the changing tables cannot but be noticed: how China has taken over the US plight, raising with it another outburst of tension. How these oil-supplies flow to China made the Malacca Straits another vital interest, while the machismo that accompanies a generation of record-breaking economic growth that China experienced could only automatically spill over on to the Taiwanese Straits, complicating matters there.

Small wonder, then, that the US navy has been alerted all around the Asian mainland. Lesser issues than confronting China led to the US naval mobilisation. The first was against North Korea's nuclear missile-testing three years ago, which produced such a thaw that Kim Jong-un even met Donald J. Trump (or the other way round) twice, in Singapore and Hanoi, yet inevitably failing to produce saner outcomes. The second is against Iran this year, after the United States unilaterally and alone disbanded the P5+1 2014 nuclear agreement with Iran. The third may be unfolding as this is being written along the Taiwanese Straits against the background of US tariffs against China beginning to bite.

If China is on the front-line in the Taiwan Straits, it has placed itself within the Hormuz firing-range, with infrastructure projects riddling Iran and Saudi Arabia. These were not part of the original BRI roadmap, of which Malacca Straits directly served as the heartland. All pieces seem to be in place for any trigger-happy chief executive to do the unthinkable. Unfortunately, we have too many such leaders currently to shift attention away. Our only hope is China elevating economic global networking over military grandstanding.

 

Dr. Imtiaz A. Hussain is Professor & Head of the Department of Global Studies & Governance at Independent University, Bangladesh.

imtiaz.hussain@iub.edu.bd

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